François Hollande has won France’s presidential election, giving the country its first Socialist president in almost two decades, exit polls showed Sunday.

According to Ipsos polling institute, the left-wing candidate took 51.7% of the vote to incumbent Nicolas Sarkozy’s 48.3%.

Celebrations are underway at the iconic Place de la Bastille in central Paris, the same spot where the last Socialist to win a presidential election, François Mitterrand, celebrated his first victory back in 1981.

PORTRAIT

Hollande, who voted on Sunday in the central Corrèze region, which he represents in the French parliament, was considered the frontrunner throughout the campaign, at times leading his rival by as much as 10% in opinion polls.

In an often bitter presidential campaign, Hollande promised to hire more staff to boost France’s state education system and to reduce the retirement age from 62 to 60 for people who have completed a minimum 41 years of work.

He also pledged to raise taxes on the wealthy and balance the country's budget by 2017.

And while both the far right and Sarkozy adopted an anti-immigration stance during the campaign, the Socialist candidate stood by a promise to give foreigners the right to vote in local elections.

Socialists return to power

On Sunday, Sarkozy became only the second French president to fail to claim a second mandate since Valéry Giscard d'Estaing was swept out of office in 1981.

It was also the first time the Socialist Party won a presidential contest since Mitterrand's re-election in 1988.

France's Socialists will be hoping to use the vote’s momentum to win back a majority in parliament in elections this June.

Before then, governments around the world will be keenly watching Hollande's first steps on the issue of Europe’s continuing debt crisis

The Socialist president-elect, who has emerged as a new champion for Europe's anti-austerity camp, was expected to call German Chancellor Angela Merkel on Sunday evening.

Merkel, who has advocated strict austerity in Europe, backed Sarkozy in the elections.

“He will talk with the German chancellor because in that exchange lies the key to Europe’s recovery, redirecting Europe towards growth, competitiveness and protection,” said Jean-Marc Ayrault, a prominent Socialist who is being touted as a possible future prime minister.

A meeting of the so-called Group of Eight leading world economies on May 18 in the United States could be the first opportunity for Hollande to shake hands with President Barack Obama and other heads of state.